FOR IMMEDIATE RELEASE	

AT

TUESDAY, JULY 14, 1998	

(202) 616 2771

TDD (202) 514 1888

 
JUSTICE DEPARTMENT SETTLES ANTITRUST SUIT WITH GENERAL ELECTRIC;


ELIMINATES RESTRICTIVE SERVICE EQUIPMENT AGREEMENTS


 
GE also Divests Service Software to win DOJ


Approval of Innoserv Acquisition


 
	WASHINGTON, D.C.    The Department of Justice's Antitrust
Division today reached agreements with General Electric Co. in
two separate cases that will promote competition in the service
of medical equipment and medical imaging equipment such as MRI's
and CT scanners.  

	In an agreement that will settle an antitrust lawsuit filed
in 1996 against GE, the company will remove restrictions it had
imposed in software licenses with more than 500 hospitals
throughout the country.  The restriction prevented the hospitals
from competing with GE to service medical equipment at other
hospitals and at clinics.  

	In the second case, GE resolved the competitive concerns
raised by its proposed acquisition of InnoServ Technologies, an
organization that services medical imaging equipment for
hospitals, by agreeing to sell InnoServ's service software.

	"The Department's settlements will restore competition in
medical equipment service markets, reduce the prices paid by
hospitals and other health care providers, and help to lower
health care costs for all consumers," said Joel I. Klein,
Assistant Attorney General in charge of the Department's
Antitrust Division.

	GE, the world's largest manufacturer of medical imaging
equipment, is also a leading provider of service for all types
and brands of medical equipment.  It competes in providing
service with independent service organizations and hospitals that
service their medical equipment themselves.  Many hospitals with
in house service departments also want to offer high quality
service to other nearby hospitals or clinics.  And, in sparsely
populated rural areas, these hospitals may be the only service
providers other than GE that are qualified to service certain
equipment.

	Hospitals with in house service departments may also license
from GE special software that dramatically improves the speed
with which the hospitals' engineers can service and repair
medical imaging equipment.  The Department's licensing lawsuit
alleged that prior to 1996, GE required any hospital seeking such
a license to agree not to compete with GE to service medical
equipment of any kind  whether GE's or that of another
manufacturer  at any other health care facility.  For example, a
hospital that licensed GE's software to service its own GE CT
scanner had to agree not to service a Siemens MRI or ultrasound
unit at a neighboring clinic.

	"While GE has a legitimate interest in protecting its
intellectual property from misuse, these restrictions went far
beyond what was appropriate.  GE forced the hospitals to choose
between licensing the software, and thereby lowering their costs,
and offering service to other health care facilities. 
Elimination of these restraints imposed by GE will allow
hospitals to compete by offering low cost, high quality service,"
Klein said.  The restrictions also harmed competition in the
markets to sell imaging equipment by making it harder for
hospitals to obtain service on some brands of equipment.  Health
care providers in the U.S. spend more than $3 billion a year to
have their medical equipment serviced. 

	Under the proposed settlement of the licensing lawsuit, GE
will void the restrictive provisions in its existing licenses,
and commit not to restrict hospitals from providing service on
medical equipment as a condition of receiving software licenses
in the future.

	In another case involving the service of medical imaging
equipment, the Department today allowed GE's acquisition of
InnoServ Technologies to proceed after GE agreed to sell
InnoServ's "PREVU" software, also used to service medical imaging
equipment, and to settle the licensing lawsuit.   

	InnoServ, based in Arlington, Texas, is an independent
service organization that services medical imaging equipment.  It
competes with GE to service medical imaging equipment at
hospitals and health care facilities throughout the country.

	InnoServ's PREVU software is one of very few programs
available, besides that offered by GE, to service some models of
imaging equipment.  "By divesting this software, other service
providers will be able to provide competitive service," said
Klein.  "Hospital patients will benefit from that competition by
obtaining lower prices and better quality service.  In addition,
settlement of the licensing lawsuit will allow hospitals with in 
house service departments to offer such services to third
parties."

	The Department filed suit in the federal district court in
Washington, D.C. to block the InnoServ acquisition, and at the
same time filed a proposed settlement that requires GE to sell
the software to a third party approved by the Justice Department. 
The software's buyer could use PREVU in its service business, or
resell or license PREVU to other parties.  If GE is unable to
divest the software within six months, a trustee will continue to
try to sell it, or may license the software to service providers.
	GE is headquartered in Fairfield, Connecticut, and through
its subsidiary, General Electric Medical Systems based in
Waukesha, Wisconsin, manufactures various models of imaging
equipment.

	As required by the Tunney Act, both proposed settlements
will be published in the Federal Register, together with the
Department's competitive impact statements.  Any person may
submit written comments on either or both of the proposed decrees
during 60 day comment periods to Mary Jean Moltenbrey, Chief,
Civil Task Force, Antitrust Division, U.S. Department of Justice,
Suite 300, 325 Seventh Street, N.W., Washington, D.C. 20004,
telephone (202) 616 5935.

	At the conclusion of each 60 day comment period, the federal
district court in which the settlement was filed may enter the
decree upon finding that it serves the public interest.

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